Industry Updates

Corporate Re-Branding  A Success, A Failure

24 Apr 2013

There are many reasons why a company or brand will need to rebrand during the course of its lifetime.

Often, given the fluid nature of todays business environment, change could be necessitated by merger and acquisition activity, or even demergers.

Then, names could be out of step with trends  as was Kentucky Fried Chicken; the name could be too old-fashioned or traditional, or associated with negative connotations  as was The Spastic Society in the United Kingdom; or the name could simply be associated with negative events or historical figures  as is the case with many street names in South Africa named after Apartheid figure-heads.

Theres also the fact that names could be restrictive from a business sector or a geographic point of view.

Whatever the reason, what remains unchanged is the need to carefully manage the re-branding for it to be successful.

And no organisation knows that better  with hindsight  than Royal Mail, which went to Consignia and back to Royal Mail in just 15 months.

Contrasting that re-branding exercise with that of a highly successful one, Anderson Consulting to Accenture, highlights several key factors anyone working on the re-branding team should be well aware of.

When:January 2001:Announced change to Consignia

March 2001: Changed to Consignia

June 2002: Changed back to Royal Mail

Why:The Government wanted to liberalise the postal services and dismantle its monopoly in three phases by 2006. This included repackaging the post office as a plc, at arms length from the Government. At the same time, the company wanted to gear up for the loss of the monopoly loss, preparing for a new era of semi-independence, and more diverse operations (logistics, customer call centre, operations and acquisitions abroad). The team also noted the need to pull different divisions (Royal Mail, Parcelforce, Post Office, for example) together under a common banner.

How:Over £500 000 was spent on consultants and implementation.Work scope included researching what the current name stood for (trust, honour, valour, etc) and brainstorming new names.There is no evidence of the name Consignia being tested with customers.There was little to no staff engagement in the process.They didnt advertise the change to Consignia.

What happened next?The failure meant a quick brand reversal in which Consignia/Royal Mail incurred about £1-million consigning the Consignia name to history thanks to having to alter signs on 3000 buildings to meet company law requirements, to having to throw away letterheads, business cards, sales dockets ... and mugs and other branded promotional material.

What went wrong?The actions undertaken by management at the time of the restructuring didnt reinforce the organisations values nor did they reflect how the new organisation was going to trade in the future.

As a result, the name change coincided with an underperformance crisis and became associated with loss-making, job-cutting, etc. At the time, Royal Mail incurred a loss of £1.1 billion for the year (or £1,5m/day in a three month period in 2001). They also enacted a restructuring programme, shedding 30 000 jobs and closing a third of urban post offices.

Nowhere, did they include a reference to what they actually were; that is, they didnt attach meaning to Consignia.

Although they thought the name was indicative of consign, which strictly means to entrust to the care of, they didnt communicate this to consumers. In fact, in modern day use, consign is often used in the context of throwing something away. And, in Spanish, consignia means lost luggage.

In addition to the poor implementation from an advertising and communication stand point, they didnt involve staff adequately in the process. As a consequence, the name was boycotted by the unions.

Key lesson:A name change is not a substitute for taking actions that address and change negative customer and staff experiences.

When:August 2000: Arbitrator ruled the name change must be completed by end December 2000

Oct 2000: Rebranding announced

January 1, 2001: Name change effective

Why:Anderson Consulting was formed in 1989 when the consulting capabilities split from Arthur Andersen. It doubled its revenue between 1996 and 2000, making it larger than Arthur Andersen. This lead to sibling rivalry and Anderson Consulting was paying 15% of profits to Arthur Anderson. There was a 2½ year, $33million court battle when Andersen Worldwide/Arthur Andersen started a new consulting firm in competition to Anderson Consulting. The arbitrator ruled in favour of Anderson Consulting excusing it from its 15% obligations but gave it to December 31, 2000 to change its name.

How  name selection:They launched BrandStorming, a global employee programme encouraging employees to submit names and received 2 677 name options from 42 countries. A shortlist of about 50 names meeting positioning and personality criteria were put through further global evaluation (trademark and URL availability, possible cultural sensitivities, local market pronunciation).

Partners from all offices voted for the name they best thought matched the companys vision. Accenture was preferred by twice as many partners as the next closest option.

How  they went to market:There was an aggressive global rebranding campaign to reinforce new marketplace positioning and introduce new brand to clients, recruits and general public.

The strategy was to phase-in (accenture) and phase out (Anderson Consulting. Soon after arbitration, they ran multi-media teaser campaign, featuring graphic of partially torn AC logo and message: Renamed. Redefined. Reborn. 01.01.01. This was important as they wanted to remain visible but not to promote the Anderson Consulting name.

On launch day, the focus shifted to the new name but executions featured the tag line formerly known as Andersen Consulting.

There was a focus on employees  they were welcomed back to work after New Year with fully rebranded offices (178 of them), signage and stationery (including business cards). The CEO and chairman communicated with employees via a series of global web casts.

Each geographic council was provided with packaged launch programme to execute locally.

Clients, too, 40 000 of them, received packages during the first week of January (including descriptive messages and brochure outlining capabilities).

When it came to talking to the media, they used colourful packages containing slogans such as accent the future and pointing the way forward rather than standard press release  this led to 120 news reports in first 2 weeks of January (including the leading business publications in each country).

They also sponsored WEF in Switzerland (25  30 January), BMW/Williams F1 Auto Racing Team, World Soccer Dream Match in Japan, Australian Tennis Open and the World Golf Championship.

By end March 2001, the new identity established and all references to old name ceased. Spend was pulled back to normal annual spending levels of $75million in just 10 major countries.

What went right?They rebranded a global corporation comprising 65 000 professionals in just 147 days: 80 days to come up with name, 67 days to implement.

Critically, this was not only a name change, but simultaneously repositioned the new entity as a network of businesses transcending the boundaries of traditional consulting and bringing innovations that dramatically improve way the world works and lives. (Prior to the arbitration ruling, they had been considering a change as consulting was seen as too restrictive given the moves into new business areas such as outsourcing and joint ventures.)

The objective was to gain back half the former brand awareness levels within 8 months of the name change. The reality was they gained all lost awareness within 12 months.

The business flourished, despite difficult trading conditions and awards for marketing, communication and business success were heaped on the organisation and its leaders in the years following the re-branding.

One of the unanticipated benefits of the re-branding was the fact that they had successfully distanced themselves from Arthur Anderson before the 2002 Arthur Andersen/Enron scandal. Accenture reminded the world theyd never engaged in public accounting and had nothing to do with Arthur Andersen when scandal broke. Ironically, Arthur Andersen was looking at a possible name change to Andersen Consulting (which they then owned) but was brought down by the Enron scandal before being able to do so.

Key lesson:Take advantage of the opportunity of a name change to establish the brand meaning. Everyone will be giving your brand far more mind space than they normally do think about the next horizon for the brand too (rebranding is part of an ongoing journey, not an end in itself)

Generally speaking, Added Values research over the years has highlighted several key learnings companies considering rebranding should heed:

Rethink your positioningOne of the major learnings is that a change in corporate identity or brand image does not automatically enhance the companys image. It may have a revitalizing effect but this will only translate into consumer perception with an accompanying shift in strategy, products, services and experiences.

Address legacy issuesSimply put, dont think a name change will change negative perceptions about a business without changing the reality. Ensure your starting point is rooted in the real perceptions stakeholders have of your overall business and not just your desired perception  and have a strategy in place to address the legacy of any negative perceptions.

More than just a logoAnother lesson to come out of the analysis is that you shouldnt be seduced into just a graphics or logo change its far bigger than that. Take advantage of the rebranding: everyone will be giving your brand far more mind space than they normally do, so work hard to establish your new brand meaning, and make real changes that benefit the brand now and in the future.

Engage your stakeholdersAlso, employee involvement is critical if you want to earn their support. Consult employees about change  their knowledge and experience could be invaluable. You should equip and prepare your employees proactively and adequately, especially those acting as spokespeople. When it comes to communicating the change, consider all stakeholders when developing your launch program, both internal and external, and use many different communication channels to cover diverse touch points. Also, consider whether or not there is a need to sensitise various target stakeholders to any change before it happens.

Plan and plan to measureMessages should be tailored and relevant to the receiving audiences. Blanket communication or a spray & pray approach is unlikely to work. It almost goes without saying that you choose your timing appropriately and carefully, taking both internal and external stakeholders into consideration, and that you monitor and measure before to provide a benchmark, and after to measure progress and outcomes.

Execute with confidenceImportantly, your attitude is vital. Dont loiter go big & quick, develop and implement rebranding plans with confidence as faltering hampers success. Manage the introduction and use of the new name and identity assertively and unconditionally  dont make it optional. Finally, be prepared for criticisms about extravagance  inside and outside the organisation.